Experts from the Gaidar Institute, Dmitry Kuznetsov and Vladimir Sedalishchev, commented for Izvestia on the significance of the new free trade agreement (FTA) between the EAEU and Indonesia. The agreement, signed in St. Petersburg, provides for the elimination of duties on 94% of the union's commodity exports and will affect about $3 bn in mutual trade.
Researcher at International Trade Department, Dmitry Kuznetsov, noted that the agreement provides Russia with preferential access to one of the fastest-growing markets.
“According to the IMF estimates, Indonesia’s economy will grow by an average of 4.7% per year until 2030, and if this pace is maintained, by 2035 the country may well enter the top five largest economies in the world in terms of purchasing power parity,” the expert said.
He emphasized that the document creates conditions for increasing exports of food, fertilizers, and metal products. "The reduction of Indonesian import duties, which for most commodity items are currently in the range of 5-15%, plays a significant role: this significantly increases the competitiveness of Russian goods. It is also fundamentally important that the agreement is long-term, which means that its impact on trade is potentially more sustainable and significant than the effect of short-term currency fluctuations," Dmitry Kuznetsov stated.
Vladimir Sedalishchev, Expert at the Economic Policy Fund, drew attention to the current modest scale of cooperation, but its high potential.
"Trade turnover in 2024 amounted to only about $4 bn, which is not much for such large countries in economic and demographic terms. Therefore, we should not expect cooperation to yield gains in terms of Russia's macroeconomic growth of more than 0.1% in the next year or two. Meanwhile, the potential for growth in bilateral trade could be enormous," he concluded.
According to the expert, Asian and African countries remain the most promising for similar agreements. “For example, Egypt and India could give Russia up to 0.5 percentage points of growth in terms of GDP growth following the creation of a free trade zone,” Vladimir Sedalishchev added.